Magna Gets Call-A-Bet System, Track in Ladbroke Deal
Updated: Saturday, December 23, 2000 8:08 PM
Posted: Friday, December 22, 2000 8:07 AM
Frank Stronach, whose Magna Entertainment paid $53 million for account wagering system and Pennsylvania racetracks.
Magna Entertainment, the growing racetrack company run by Frank Stronach, has entered into an agreement with Ladbroke Racing and a subsidiary to purchase Ladbroke's Pennsylvania-based account wagering system ("Call-A-Bet"), the Meadows harness track, and four off-track betting facilities, plus an interest in the Racing Network satellite TV channel.
The price, disclosed in a news release, is $53 million, with one half in cash, one quarter in Magna's Class A subordinate voting stock, and one quarter payable through a promissory note that matures two years after closing.
Frank Stronach, president and chief executive officer of Magna, said in a statement: "The acquisition of the Call-A-Bet account wagering system, together with Ladbroke's other Pennsylvania horse racing operations, is an important step in MEC's strategic plan of building the premier account wagering business in the country. By acquiring the existing Call-A-Bet system, which already has a profitable operating history, MEC will significantly advance its electronic media strategy and realize an immediate improvement in its earnings per share." It isn't known how many accounts the Call-A-Bet system has, but it is the account wagering service partnering with Youbet.com, a struggling on-line wagering company.
Magna's stock (MIEC) closed down $.15 Thursday at $4.37 prior to the announcement. While in recent months the stock has traded midway between its high and low points of 2.81 and 7.87 since going public, on at least two occasions in the past two weeks it has experienced unusually high trading volume.
The addition of Ladbroke's assets and a portion of the Racing Network provides some insight into Stronach's strategy for Magna and puts him in direct competition with the TV Games Network, a strategic partner of the National Thoroughbred Racing Association. Stronach is withdrawing his racetracks from the NTRA, citing differences over governance and other issues, including the relationship between the NTRA and TVG. Stronach has invited NTRA officials and others throughout the industry to attend a forum at Gulfstream Park on Jan. 14 to discuss his concerns with the NTRA.
FREE! E-Newsletters from The Blood-Horse!...
Follow the top stories of major racing events, racing previews and results with FREE e-newsletters from bloodhorse.com. As news develops, we'll deliver updates to your inbox. Follow important events moment by moment, step by step!